Is a bigger car based on Nano-platform on the anvil?

The Tata Nano is far from dead; in fact it has sold 2.5 lakh units in 5 years

Tata Motors' mini car Nano, launched in 2009, thought to be a gamechanger in those days, didn't quite live up to the expectations. But the company has far from given up on the Nano, which it feels has a huge brand recall globally. According to sources, Tata is actively working on developing a new car based on an upgraded Nano platform, which would sport a 1000 cc engine and would be positioned in between the Nano and the company's latest hatchback Tiago. 

Multiple sources close to the development claimed that a car is under development which has been codenamed Pelican, that would be based on an upgraded Nano platform and would reflect the company's new Impact Design philosophy. This would sport a bigger sized engine of around 1000 cc (the Nano runs on a 624 cc two-cylinder engine). The car is likely to roll out from the Sanand plant in Gujarat. While the Nano was known for its frugal engineering and focus on cost-cutting strategy, the new car is likely to be positioned in a more stylish avatar. The company has already communicated the same to most of its vendors, as changes in engine along with a new exterior look would require bigger wheels, bigger batteries, etc.

Tata also has a two-cylinder 800 cc diesel engine ready for the Nano, but the project was put on the back burner as the company thought the engine needed refinement. However, after Maruti Suzuki India launched a diesel variant of the Celerio, is the company likely to rethink its decision of bringing out a diesel Nano? 

When asked about the projects, a company spokesperson said: "At any given time, we work on a number of projects. However, in the context of the ongoing debate of diesel technology, the diesel engine for the Nano is  currently not being considered. Nano remains an important brand and we constantly continue to evaluate the best market-suited variants for it."

Reiterating its faith on the Nano brand, Tata Motors said: "We are pleased with the good sales momentum for the GenX Nano, launched last year, finding a good response with the customers. The Nano has been a visionary and ground-breaking decision that changed the passenger vehicle business in the Indian market. It set a different pace and created a new segment and is a testimony to our commitment to offer innovative mobility solutions."

In fact, the company also claimed that the Nano is actually among the top 5 brands in the hatchback market to have crossed the 2.5 lakh sales mark in five years. This perhaps is because of the initial bookings of 100,000 cars priced at Rs 1 lakh. Sales of the car have continued to fluctuate ever since. Tata sold 21,012 units of the Nano in 2015-16. However, the year-on-year sales for April 2016 was down to 1,100 units from 1,480 in 2015. Sales in April, however, have grown by over 50% on a month-on-month basis from March this year, and the company hopes to build on this momentum. 

"We are delighted with the response for the GenX Nano launch in 2015 and the overall re-positioning of the brand. We continue to see fresh set of customers, first time car buyers visiting our showrooms. Moreover, the Nano registered a 50% month-on-month growth in April 2016 over March 2016 and we are hoping to further build on this momentum," said the spokesperson. 

Tata feels that the growing response to GenX Nano validates that the right product features and positioning bring in customers even in challenging market conditions. Ever since the launch, Tata has continued to add features to the car, from power steering, to openable boot, to now an AMT version. From a frugal common man's car, Nano has been repositioned as a smart city car, which has found favour among women. In FY11, 14% of the owners of Nano cars were women whereas that number has jumped to 23% in FY16 with the introduction of GenX Nano. 

Therefore, even after the launch of the Tiago earlier this year, which has so far seen some traction in the domestic market thanks to its disruptive pricing, the Sanand plant continues to make around 2000-2500 Nanos a month. 

Around 42,561 Nano cars were produced from the Sanand factory from January 2014 to December 2015, the state government had informed at the assembly in response to a question in March. The company is working to change that. Tata is now also planning to cash in on the global interest in the Nano brand. 

The spokesperson said: "Ever since its first showcase at the Auto Expo in Delhi in 2008, the Nano drew attention and generated interest among global audiences and the brand recall continues across the globe." She added: "Though our focus with the Nano is to cater to the domestic market first, we have also been exporting it to Sri Lanka, Bangladesh and Nepal, and have received positive market response."

In fact, Nano exports have grown 177% (as per data from the Society of Indian Automobile Manufacturers) year-on-year to 1126 units in 2015-16, from just about 406 units in the previous fiscal. 

Nano's Journey so far

March 2009: Tata Nano launched in India (Priced Rs 1 lakh for first 1 lakh bookings)

June 2010: Nano rolls out from Sanand plant

May 2011: Tata starts exporting the Nano

October 2013: CNG Nano launched (current price around Rs 2.65 lakh)

January 2014: Nano Twist launched 

May 2015: Gen X Nano launched, priced Rs 2.06 lakh to Rs 3.03 lakh